UK insurance companies are embarking on aggressive ecommerce strategies, often ahead of their US counterparts.

According to the survey of 25 of the UK's top 100 insurers, conducted by US analysts Meridien Research and commissioned by Intelligent Environments, while larger firms on both sides of the Atlantic were the most advanced in their ecommerce plans, a higher proportion of UK insurers have begun to move the policy origination and servicing processes online.

Despite the obstacle caused by having to integrate the companies back end legacy systems often, 60 per cent of respondents identified ecommerce as "crucial" to their firm's business strategy.

"The results of the survey leave it in no doubt that UK insurers are taking ecommerce very seriously," said Octavio Marenszi, research director at Meridien.

"Many of the biggest players have shown that they are prepared to confront the business issues of trading on the Internet and go after the opportunities aggressively. They are not going to let technical problems, however complex, stand in their way," continued Marenszi.

The insurance industry is heavily regulated restricting what can be sold online, however the research reveals the UK the companies recognise the importance of making the most out of what they can offer over the Web.

According to Richard Wilcocks, chief executive of Intelligent Environments companies such as Woolwich, Eagle Star Direct, and Sun AXA have made the greatest advances in offering their products and services over the Web.

Commodity type policies such as motor, home and travel are the easiest to adapt for origination on the Web, and Meridien predicts by 2003 five per cent of motor insurance will be sold online.

Other policies which are either too complex or are not allowed to be sold online such as pensions, and investment policies can still be enhanced by the Web. By next year Meridien expects almost 20 per cent of the world's top personal lines with online access to account information, a feature that will help insurance companies retain customers.

Insurance companies, like travel companies and banks before them, have now recognised the opportunity the Internet brings to reducing transaction costs.

The research found that US insurers said the per-transaction costs of administering policies could be cut from $19 via an agent to as little as 45 cents via the Internet.

It is this knowledge that is the main driver to them offering more over the Web, with 32 per cent of respondents saying it was the most important factor.

Improved customer service was the second most important factor, mentioned by 21 per cent of UK insurers in the survey.

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